The traditional manual methods of collecting, reviewing and paying vendors' invoices, especially periodic invoices, e.g., utility bills, are fraught with problems for customers having large volumes of such invoices. These problems include: (1) Failure to get the invoices through the customer's review, approval and accounts payable ("AP") process in time to avoid late notices, late payment fees and service shut-off; (2) inability to properly review the invoices for accuracy, e.g., comparing current charges to those of prior invoices, because such a review would be too costly and/or cumbersome, resulting in billing errors that may never be found; (3) unwillingness of employees of the customer, e.g., store and branch managers, to give the review process a high priority or to put much time into the review process because review is considered to be tedious, resulting in invoices that are unduly held up or not properly reviewed; (4) use of AP operations staff to review invoices, resulting in a labor-intensive and, therefore, costly review process; and (5) a frequent necessity to review invoices only after payment has already been made.
Recently, several types of vendors, e.g., utility companies, lessors of commercial property, and uniform providers, have begun to use an EDI invoice that complies with the ASC X.12 810 standard ("810 Invoice"). The telephone industry has begun to use an EDI invoice that complies with the ASC X.12 811 standard ("811 Invoice"). These electronic invoices contain the same information as do analogous paper invoices, but the information is electronically transmitted via a network from the vendor's computer system to a remote computer in a standardized format.
Further, various vendors are beginning to accept payment for bills in an EDI format that complies with the ASC X.12 820 standard ("820 Payment"). This electronic payment contains all of the payment information that a customer would include on a conventional AP check and stub, e.g., payer name, amount, invoice number, account number and dates. A vendor's bank can receive an 820 Payment and automatically post the receivable to the vendor's accounting system, almost instantaneously. Many customers of such vendors, however, do not have EDI capabilities.
There is a strong need in the banking industry for a system that will permit a financial intermediary to automatically process in an efficient and timely manner invoice information from a vendor on behalf of the vendor's customers. Such a system should take advantage of financial EDI technology, which allows companies to exchange payments and related data with trading partners using the Automated Clearinghouse ("ACH") or private EDI networks. Several banking institutions have distributed marketing materials that make reference to various invoice processing services, which are purported to be either currently available or in the development stage. However, the applicants are unaware of any currently-existing invoice processing system that takes full advantage of current EDI technology and provides automated pre-approval of invoices.